Effect of the COVID-19 Pandemic on Indonesian Oil and Gas Upstream Activities
Indonesia is home to numerous oil and gas fields, and upstream oil and gas activities are integral to the country's economic growth. Here are the key regulatory changes in response to the COVID-19 pandemic affecting Indonesia's oil and gas sector.
Indonesia is one of the many countries experiencing major changes to their social and economic structures because of the COVID-19 pandemic. People have been forced to aggressively minimize social interactions in an attempt to prevent the spread of the virus. Inevitably, these measures will have a major effect on various business sectors.
One of the sectors in Indonesia that has been forced to adapt to this unique situation is the oil and gas sector. Indonesia is home to numerous oil and gas fields, and upstream oil and gas activities are integral to the country's economic growth. Here are the key regulatory changes in response to the COVID-19 pandemic affecting Indonesia's oil and gas sector.
Oil and Gas Upstream Activities
Indonesian upstream oil and gas activities fall under the jurisdiction of the Special Task Force for Upstream Oil and Gas Business Activities (Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi, or SKK Migas). SKK Migas issued a circular letter immediately following the enactment of Presidential Decree No. 7 of 2020 regarding the COVID-19 Mitigation Acceleration Task Force to suggest that production-sharing-contract (PSC) contractors continue production, taking the necessary precautions and putting in place risk-management measures for workers and surrounding communities.
Work-from-home arrangements are allowed for upstream oil and gas workers outside of oil fields, as long as such arrangements do not interfere with production. PSC contractors are advised to take precautionary measures such as avoiding activities involving the gathering or large numbers of people, limiting and postponing all in-person meetings/gatherings, checking the temperature of all visitors, reporting all people under COVID-19 surveillance to the local public health office, and following all procedures and policies implemented by public officials.
PSC contractors are also encouraged to consider temporarily changing work schedules at oil and gas fields to 21:21 (21 working days followed by 21 rest days) or 28:28 (28 working days followed by 28 rest days) or some similar schedule according to the operational condition of the field. This is in order to give workers sufficient opportunity to self-quarantine. All changes to work schedules must be reported to SKK Migas.
Lastly, PSC contractors are expected to coordinate with SKK Migas to communicate with the head of the relevant regional government (regent, mayor, or governor) with regard to the importance of oil and gas production and the urgency of the regional government providing support to facilitate production.